D 10 20 30 40 50 O TO 80 90 300 10 10) Consider the above figure. Autonomous con

Question

D 10 20 30 40 50 O TO 80 90 300 10 10) Consider the above figure. Autonomous consumption, in this scenario, 10) is equal to A) $60. B) S40. C $30. D) 580. 11) Consider the above figure. At an income of S60 we would expect saving 11) to be equal to A) 50. B) $10. C) 560. D) $40. 12) The slope of the consumption function is the A) APS. B) MPC C) MPS D) APC. 13) The relationship between planned real investment spending and the 13) interest rate is A) direct C) inverse. B) constant. D) highly volatile. 14) In the above figure, if there is no real planned investment spending, no 14) government spending no taxes, and no net export spending what is autonomous consumption? A) $0.0 trillion C) $2.0 trillion B) $3.0 trillion D) $1.0 trillion

Explanation / Answer

Question 10). Answer :- Option B). $ 40.

Explanation :- Autonomous consumption = $ 40. (Option B).

Question 11). Answer :- Option A). $ 0.

Explanation :- Savings (S) = Income (Y) - Consumption (C).

= 60 - 60

= $ 0.

At an income level (Y) of $ 60, Consumption (C) is $ 60 and Savings (S) is $ 0 (60 - 60).

Question 12). Answer :- Option B). MPC.

Explanation :- Geometrically, Marginal propensity to consume (MPC) is the slope of consumption function.

Question 13). Answer :- Option C). Inverse.

Explanation :- With the rise in planned investment expenditure, Interest rate falls and with the fall in planned investment expenditure, interest rate rises. Accordingly, there is inverse (negative) relationship between the planned investment expenditure and interest rate.

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